Another 2 million borrowers could save an average of nearly $300 a month on a refinance thanks to last week’s 10-basis-point drop in mortgage rates. Recent data from Black Knight found the number of high-quality refi candidates moved back up to 13 million last week — potentially putting $3.6 billion back in to homeowners pockets.
On March 25, the data analytics company reported 7 million high-quality candidates fell through the cracks on the market’s “forever rates” after a 40-plus basis point rise from February dropped their eligibility. For Black Knight, these candidates are defined as a 30-year mortgage holder with a maximum 80% loan-to-value ratio and credit scores of 720 or higher.
In February, there were 18.1 million of these borrowers roaming the market. By March, there were just 11.1 million — the smallest number of potential refi candidates in a year. However, if these candidates do qualify, approximately 2.5 million of them could save at least $400 a month. Within that group, 1.5 million could save $500 or more by refinancing at the market’s current rate.
California, once again, took the top spot as the state with the greatest potential savings. The Golden State now has 1.75 million refi candidates who could save a cumulative $672 million in payments and interest. In the New York metropolitan area, there are 862,000 refinance candidates. With an average savings of $462 per borrower, they’d cumulatively save nearly $358 million.
Disregarding Black Knight’s eligibility criteria, there are almost 21 million 30-year mortgage-holders who are “in the money,” with current interest rates at least 0.75% above today’s rate.
But consumers are going to need to act fast as rates are projected to rise during the rest of the year.
Fannie Mae’s economic and strategic research group estimates refinance origination volumes in 2022 to total $1.1 trillion, a 48% decline from 2021 and a $40 billion downward revision from last month’s forecast. On the flip side, the group is now expecting 2021 and 2022 purchase volumes for the overall mortgage market to total $1.9 trillion for each year, an upward revision of a whopping $66 billion and $84 billion, respectively, from the previous month’s forecast.
The post 2 million refi candidates eligible after mortgage rate drop appeared first on HousingWire.